Cisco Beats the Street, But the Street Still Isn’t Impressed
The markets were unforgiving on Wednesday. Shares of Cisco Systems (NASDAQ:CSCO) fell more than 4 percent in post-market trading after the technology company raised its dividend and reported fiscal second-quarter earnings that beat analyst expectations. Fiscal second-quarter of revenue of $11.2 billion was higher than the mean analyst estimate of $11.03 billion, and adjusted earnings of 47 cents per share beat the mean analyst estimate of 46 cents per share. Cisco’s board of directors also declared a dividend of 19 cents, a 2 cent increase from the first-quarter.
“We had a record quarter of returning $4.9 billion to our shareholders through our quarterly dividend of approximately $900 million and share repurchases of $4.0 billion,” stated Frank Calderoni, executive vice president and chief financial officer, in the earnings release. “Our financial strength gives us the confidence to provide a meaningful return to our shareholders.”
But all this still wasn’t good enough to stem a tide of selling pressure. The bar that was set for Cisco was pretty low, and beating it wasn’t all that impressive. Both earnings and revenue are down about 8 percent on the year. Cash flow fell about 12 percent on the year to $2.9 billion.
In its conference call with analysts, Cisco also reported that sales in its switching business came in at $3.27 billion, below analyst expectations for sales of $3.31 billion. The company’s data center business did grow by 10 percent, though.